Abstract
Understanding how multinational corporations (MNCs) go about managing employment relations in diverse host country environments is increasingly central to wider analyses of the management of labour. Decisions taken in MNCs affect not just those who work in and around MNCs themselves, but also have the potential, through spillover effects of various kinds, to shape wider local and national employment relations patterns and indeed systems. This is particularly the case in regions and countries which are highly dependent on foreign direct investment, such as the transition economies of central and eastern Europe.
There is a reasonably substantial academic literature on multinationals and employment policies and practices (for an industrial relations focused review see Collings, 2008) which attempts to unpick the complex relations between various levels of the MNC, economic imperatives, countries of origin and host economies. However, as I have argued elsewhere (Almond, 2011) the field is often marred by a number of important flaws. These include the frequent use of overly simplifying models of economic rationality (this is a feature both of managerialist research on human resource management, but unfortunately also of a good deal of critical analysis). A further common problem is the reification of institutions, such that it is imagined that likely ‘host country effects’ can simply be read off from a textbook understanding of countries’ national industrial relations systems, or, worse, by a claim as to whether the relevant country has a ‘liberal’ or ‘coordinated’ market economy.
Marta Kahancová’s important study ambitiously attempts to rectify both these analytical problems, at the same time as attempting a very detailed four country comparison of the construction of employment relations within one multinational (a thinly disguised Dutch electronics manufacturer). In examining subsidiaries in Belgium, France, Hungary and Poland, it also represents an East-West comparison in this field. For the outsider, it should be noted that serious multiple subsidiary comparisons of MNCs are rare (not least because of problems in achieving the level of access required), and ones involving countries outside the usual large country suspects even rarer; it is therefore important to highlight here that this would be an important research project even if its theoretical ambitions were much more limited.
The work is firmly sociological in approach. Its argument is that institutional influences are mediated (or indeed co-constructed) by relations between local social and economic actors, and different levels of management within the MNC. It therefore focuses squarely on the processes by which such relations emerge and become embedded. Accordingly, there are substantive chapters on social relations within the MNC, and between the MNC and local societies, alongside a somewhat more ‘traditional’ industrial relations chapter investigating the relationships between the MNC and local workers and trade unions. Finally, there is a very rich chapter on international interactions among worker representatives. The latter is particularly notable as accounts of transnational agency among trade unionists and other worker representatives rarely take place within a sustained comparative analysis of employment relations between the subsidiaries of a particular company. Empirically, the work concludes that most employment practices within subsidiaries are primarily constructed through relations between MNCs and workers and/or trade unions at a local subsidiary level.
Of course, it is easy to ask questions about whether this empirical finding is generalizable; clearly, as the author herself stresses, the case study company remained a relatively decentralized multinational at the point that the research was carried out, and the balance between levels of influence could well be different in MNCs with different managerial strategies and philosophies. However, I would not see generalization as the primary goal of this research. The detailed analysis of different levels of influence in this book provides us with a wealth of empirical evidence from a particular company at a certain point in time with a research framework that encourages replication, both in different MNCs and in subsequent time periods.
While the work’s sociological focus is one of its strengths, I did feel at points, particularly in the introductory chapter, that this led the author to take an excessively reductive view of economic logic. In particular, findings relating to wage premiums and corporate social responsibility type behaviours would normally be intended to have labour market or wider corporate image benefits, rather than being extra-economic (as indeed the author reflects in the relevant empirical chapter). In general, I would have been more comfortable if the framework had tried to extend ‘rationality’ through its multi-level analysis of relations, rather than reducing it to a very narrow interpretation; a reductive view risks conceding ‘rationality’ to the followers of the more formulaic forms of economic theory. Perhaps inevitably, the book also retains some hallmarks of its origins as a doctoral thesis. This may explain what I sometimes thought was a degree of difference-maximization between the author’s theoretical framework and those who had previously performed somewhat comparable research.
All that said, Kahancová’s achievements here are impressive. This is a carefully researched, detailed piece of qualitative research, which goes across national borders almost seamlessly. Its empirical findings admit alternative interpretations precisely because the empirical detail is so rich and granular. In terms of its contribution to theory, I would highlight what this work brings to the contemporary study of institutions, and particularly to the role of actors as ‘institutional makers’ as opposed to merely ‘institution takers’ as theorized by Colin Crouch, Wolfgang Streeck, Kathleen Thelen and others. While actor-centred institutionalism is an important prevailing trend within comparative employment relations scholarship, as well as in wider organization studies, it remains frustratingly rare that we find a detailed and convincing comparative account of processes of institutional construction and reconstruction within and around particular organizations.
For these accomplishments, this is an important book. It deserves to be read by all those with an interest in the micro-foundations of institutions, as well as by anybody who is concerned with the processes by which MNCs construct industrial relations and human resource management practices across subsidiaries in substantially different local and national employment systems.